Azerbaijan: Power Distribution Enhancement Investment Program

Sovereign Project | 42401-014

The Asian Development Bank is working with Azerbaijan to upgrade power distribution networks that will benefit over 1.4 million consumers and give the wider economy a lift by providing more reliable electricity supplies. The project is helping address the bottleneck in electricity supply and provide round-the-clock and reliable electricity to households in secondary cities and rural areas.

Project Details

  • Project Officer
    Tareen, Adnan
    Central and West Asia Department
    Request for information
  • Country/Economy
  • Modality
    • Loan
  • Sector
    • Energy
Project Name Power Distribution Enhancement Investment Program
Project Number 42401-014
Country / Economy Azerbaijan
Project Status Active
Project Type / Modality of Assistance Loan
Source of Funding / Amount
MFF Facility Concept 0091-AZE: MFF Power Distribution Enhancement Investment Program
Ordinary capital resources US$ 750.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Sector / Subsector

Energy / Electricity transmission and distribution - Energy efficiency and conservation

Gender Equity and Mainstreaming Some gender elements
Description The Power Distribution Enhancement Investment Program (the Investment Program) aims to support the government's efforts in providing reliable and efficient power supply to meet its growing energy needs for inclusive development, especially in secondary cities and rural areas. Through rehabilitation and augmentation of the power distribution network throughout the country, the investment program will improve power supply reliability and efficiency, and support the improvement of operational and financial performance of the state-owned power distribution company, Azerishiq Open Joint-Stock Company (OJSC).
Project Rationale and Linkage to Country/Regional Strategy A multitranche financing facility (MFF) is proposed for the Investment Program, which will allow ADB to establish a stronger long-term partnership with the government meeting its development goals, support energy sector reform, improve energy policies, and strengthen governance and capacities. The Investment Program has the following key benefits: (i) support to the government in achieving its strategic development targets, (ii) introduction of modern technology and improvements in energy efficiency, (iii) support to Azerishiq OJSC to improve corporate governance and transparency, (iv) knowledge and skills transfer via the training of power utility staff to international standards in the implementation of the latest technology, and (v) improving electricity supply service quality and enhancing productivity of small- and medium-sized enterprises. The investment program will benefit 1.45 million customers, of which 60% are residential customers.
Impact increased availability of reliable electricity supply to all domestic consumers.
Project Outcome
Description of Outcome improved efficiency and reliability of the power distribution networks.
Progress Toward Outcome In Q3 2017, the rehabilitation of 110/35/10 kV substations were completed, and these were energized. Physical works on other contracts (substation rehabilitation of 35/10 kV substations is 60% completed; works on distribution lines and installation of meters) are in progress.
Implementation Progress
Description of Project Outputs

Customer services lines rehabilitated and smart meters installed and operational

Distribution network including distribution lines and substations rehabilitated, augmented, and functional

Institutional capacity improved and corporate reform achieved

Status of Implementation Progress (Outputs, Activities, and Issues)

In progress.

In progress.

In progress.

In progress.

Construction works for 110/35 kV substations completed and energized. The rest of rehabilitation works are in progress.

Works are in progress.

Geographical Location Nation-wide
Summary of Environmental and Social Aspects
Environmental Aspects No major environmental safeguards issues are envisaged under the investment program.
Involuntary Resettlement No major social safeguards issues are envisaged under the investment program.
Indigenous Peoples No indigenous peoples will be affected by the investment program.
Stakeholder Communication, Participation, and Consultation
During Project Design Series of public consultation including focus group discussions covering 6 districts of Soumgayit regency were conducted in the months of February to April 2010 in the strategic locations covered by the investment program. The objectives of C&P were: (i) disseminate project information; (ii) create awareness among the affected persons (APs) and elicit response from the public; (iii) seek the opinions of the public; and (iv) resolve the potential issues that would affect the common property and religious structures. Different categories of stakeholders have attended in focus group discussions at the village level like the project affected persons (APs) government officials, opinion leaders, among others. Informed and explained to them were the project features, about operational and safety requirements to the people in the locality, concerns and perceptions on the adverse impacts on their property and assets, livelihood, access to public facilities and common property resources, etc. Disclosed during the consultations were the social and environmental impacts and resettlement and rehabilitation issues.
During Project Implementation Public consultations
Business Opportunities
Consulting Services Azerishiq will recruit all consulting services to be financed under the Investment Program in compliance with Guidelines on the Use of Consultants (April 2010, as amended from time to time). Consultants will be recruited following the quality- and cost-based selection method using a quality:cost ratio of 90:10.
Procurement Azerishiq will carry out all procurements to be financed under the Investment Program in compliance with ADB's Procurement Guidelines (April 2010, as amended from time to time). Azerishiq will follow international competitive bidding (ICB) procedure for works contracts estimated to cost the equivalent of US$10 million or more, and goods contracts estimated to cost the equivalent of US$ 500,000 or more. Azerishiq will use national competitive bidding (NCB) procedure for works contracts estimated to cost less than US$10 million and for goods contracts estimated to cost less than US$500,000. ADB's standard bidding documents (SBD) will be used for all procurements.
Responsible ADB Officer Tareen, Adnan
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Energy Division, CWRD
Concept Clearance 04 May 2015
Fact Finding 25 Aug 2015 to 04 Sep 2015
MRM 11 Dec 2015
Approval 12 Jul 2016
Last Review Mission -
Last PDS Update 08 Nov 2018

MFF Facility Concept 0091-AZE

Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 1,000.00 Cumulative Contract Awards
ADB 750.00 - 0.00 0.00 %
Counterpart 250.00 Cumulative Disbursements
Cofinancing 0.00 - 0.00 0.00 %

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Evaluation Documents See also: Independent Evaluation

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Related Publications

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Tender Title Type Status Posting Date Deadline
AZE: Power Distribution Enhancement Investment Program Advance Notice Archived 11 Feb 2016

Contracts Awarded

No contracts awarded for this project were found